Wednesday, March 24, 2021

🔁 Is This the Great Rotation to Value?

Good morning. As the economy ebbs and flows, different sectors of the market tend to fare better..
It's the monthly jobs numbers today and they're not going to be pretty and will be possibly the tip of the iceberg as we head into May.

Good morning. As the economy ebbs and flows, different sectors of the market tend to fare better than others. Over the past few years, however, tech has had a persistently strong performance. Value stocks, defined by those as relatively cheap compared to their earnings and sales, haven't fared as well.

This is often the case. Tech stocks tend to be far more volatile and story-driven. Sometimes the story doesn't have a happy ending. With tech stocks under stress from rising interest rates, value has fared slightly better. It also doesn't hurt that many value names pay dividends at a time when rates are still incredibly low. This may not be a secular rotation to value stocks over growth names, but it is a strong trend that can't be ignored.

Are you shifting your allocation against this value/growth shift? Or are you standing firm with your existing stock allocations?

Hit reply and share your thoughts.


Now here's the rest of the news:

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MARKETS
DOW 32,422.43 -0.94%
S&P 3,910.43 -0.77%
NASDAQ 13,227.70 -1.12%
*As of market close
Stocks traded lower on Tuesday, sliding into the close.
Oil prices dropped 6.5 percent, last trading at $57.55.
Gold declined 0.7 percent, changing hands at $1,726 per ounce.
Cryptocurrencies also dropped, with Bitcoin last at $55,207.

Today's TOP TIPS
Ignore Supply Chain Problems, This Tech Giant Will Come Out Ahead
With a shortage of computer chips and semiconductors, a number of companies have had to warn that they may not be able to produce enough of some goods to meet demand. For some companies, however, that may not be as big of a problem as expected.

One such play that may fare well? Apple (AAPL). The company's steady sales, particularly with its latest iPhone, appear to put it past some of the shortage issues impacting other companies in the tech space.

» FULL STORY

Insider Trading Report: Software Acquisition Group Inc II (SAII)
Mithaq Capital, a major holder of Software Acquisition Group II (SAII), recently bought 369,924 shares. The buy increased the fund's stake by 4 percent, and came to a total purchase price of $3.89 million.

This adds on to other buys from the fund since SAII went public as a SPAC offering last month. A SPAC is a special purpose acquisition company that raises capital to buy a business outright.

» FULL STORY

Unusual Options Activity: Visa (V)
Credit card giant Visa (V) saw its shares sell off last week on news of a government probe. However, at least one trader is betting on a move higher.

That's based on the May $210 calls. Nearly 3,000 contracts traded against a prior open interest of 128, for a 23-fold rise in volume. The trade expires in 58 days, and trades right at-the-money given the current price near $208.

» FULL STORY

IN OTHER NEWS
Bull Market Hits One-Year Anniversary

The stock market celebrated its one-year anniversary of the end to last year's bear market. The pandemic drop of 30 percent in 22 days is record-setting, although it's only one of five bear market declines of at least 30 percent since the end of World War II. The strong rally back, including a rise to new highs, leads many to suspect that stocks will see a slower rate of growth in the years ahead, and pullbacks will be likely.
$3 Gas Prices Arrive as Travel Season Nears

With crude oil prices nearing $60 per barrel, and with energy producers wary after last year's volatility, the average price of gasoline has now risen to $2.89 per gallon. Prices have also climbed for 47 straight days in a row. That's leading many to predict $3 gas by Memorial Day, typically a time that indicates a kickoff to the summer driving season. That may also coincide with $80 barrel oil.
Hartford Rejects Chubb Bid

Insurer Chubb (CB) made a bid to acquire competitor Hartford (HIG). However, Hartford's board has unanimously rejected the offer, stating that it would not be in the best interest of shareholders. The offer was a 12 percent premium to where shares traded, and could have potentially merged two giants in the insurance industry already, which may have had antitrust implications.
QuantumScape Drops on Share Sale to Fund Solid-State Battery

Battery maker QuantumScape (QS) announced it would sell 13 million shares, potentially raising as much as $859 million. The proceeds would go towards funding its next-generation battery technology, in partnership with Volkswagen Group (VWAGY). Shares dropped over 10 percent on the news, indicating the amount raised and dilution involved weren't attractive to current shareholders, even if there's a long-term value from better battery tech.
ViacomCBS Raises Capital with Share Sale

Looking to raise $3 billion to fund further streaming services, ViacomCBS (VIAC) announced a share sale. The sales comes after shares have risen from around $20 to as much as over $100 in the past year, making the company one of the top performers in the S&P 500. The media giant is also starting to benefit from the return of sports thanks to its exposure to the NBA and March Madness.

S&P 500 MOVERS
TOP
WEC 4.067%
CMS 3.47%
ZM 3.428%
NEE 3.25%
LNT 3.029%
BOTTOM
M 9.505%
VIAC 9.059%
PVH 8.244%
FCX 8.026%
TRIP 7.992%

Quote of the Day
I am confident that people will reach the other side of this pandemic with the foundations of their lives intact. And I believe they will be met there by a growing economy. In fact, I think we may see a return to full employment next year.
- U.S. Treasury Secretary Janet Yellen on why the economy could grow strongly and employment could reach full strength next year following an end to the pandemic and the multiple stimulus measures in place.

Sponsored Content
Stock Options Are DEAD! "Penny Trades" Have WON…

Forget options! Because there's a NEW way to trade.

  • It can pay far more than stocks…
  • Trades can cost as little as 1¢…
  • These special trades can multiply as much as 529 times…
  • Warren Buffett made $12 billion with the idea behind this technique…
  • These trades can shoot up lightning fast — sometimes in weeks or even days…

One of these odd trades even shot up 183% in one day!

Our readers saw the chance at gains as high as an extraordinary 5,100% with one 19¢ trade.

I repeat — this is NOT options trading.

Here's the full scoop on this weird way to trade.


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